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Uranium and coal make an unlikely pair, with one boasting zero carbon emissions and the other the most carbon-intensive of all fossil fuels. However, they have more in common than one would care to admit: Both are mined materials used in power generation; both go through a legitimization journey, even if one is ascending and the other is not; and both are positioned in a dialectical relationship with renewables. Crucially, the two use the same irrefutable argument of ‘baseload’ in their justification for relevance in the energy mix: Uranium and coal are the only mined sources of baseload energy - the minimum level of continuous energy supply - something that nuclear plants and coal-fired plants are equally adept at providing. 

The purpose of placing uranium and coal in the same category for this article is not to irk our readers, nor to force an association between these commodities, but to highlight a shift in the energy transition debate. The argument put forward by both uranium and coal proponents is that the energy transition has been idealized, renewables over-hyped, and reality ignored. Or, in the words of John Borshoff, managing director and CEO of Deep Yellow, a uranium developer in Africa: “The energy transition is misunderstood and oversimplified because there is no way we can fully switch to renewables in 15 years.” 

There is another aspect to bringing uranium and coal together on the same page, and that is to show that all energy sources are on the table. For years, the energy transition debate was filled with mudslinging, especially between fossil fuels and renewables. Renewables were hit at their weakest point, intermittency (or the lack of baseload). Hitting back, coal producers were targeted for their heavy emissions, with no less than 15.4 billion t of carbon dioxide in 2023 stemming from coal burning, according to Statista. 

“The argument for decarbonization through renewables is running slimmer as people become more educated on the carbon-intensive processes for manufacturing solar panel or wind turbine infrastructure, not to mention the impossibility of recycling this infrastructure and their short lifespan, with most needing to be replaced every 20 years.  By contrast, a nuclear power plant lasts for 80 years and provides zero-emission energy.  It is becoming well-accepted that nuclear is the obvious route in the energy transition.  The richest countries in the world, along with the big banks and big tech companies, are embracing nuclear,” said Murray Hill, managing director & CEO of Elevate Uranium, a uranium developer in Namibia. 

But the finger-pointing turned more sophisticated, almost philosophical. Coal advocates were accused of putting their own interests ahead of the interests of the world. The fossil fuel camp called out the hypocrisy of shunning coal but buying everything else built at the mercy of coal-burning plants, especially in China, which is the largest consumer of coal and the largest producer of just about anything coming out of a factory. Even the cherished solar panels and wind turbines can be born in a coal-powered manufacturing site. Fossil fuel proponents also ask advocates for renewable to reflect on the issue of privilege before preaching greenness to the vast number of people that live without electricity in the world.

Completely and immediately depriving one country of a critical resource, even if it is a highly polluting resource (the largest source of carbon dioxide), could cause more harm than good. The pros and cons must be measured, and the energy options available should be seen through more than a simplistic dynamic of villain and hero. “As a global population, we should not be arrogantly arguing about who is better than the other. In a country like South Africa, it is not possible to completely get rid of fossil fuels without losing out on energy security and affordability; we need baseload power, and the 16 coal-fired power stations we have will continue to generate beyond 2035. (…) We need a diversified and dynamic energy mix for the days when there is no sun, no wind, or we have a drought season,” said Mike Teke, group CEO of Seriti Resources. 

Meanwhile, uranium sat on the side, troubled in its own ways, leaving the fossil fuel and renewable sides to fight their battle. Uranium needed time for the world to forget about the destructive properties of nuclear energy and concentrate on its productive ones; a highly efficient productivity with zero emissions. Uranium is not a fossil fuel nor a renewable, but it has exactly what the other two each lack: baseload and zero emissions. 

The energy transition is clearly not about what replaces what and when, but about reaching compromises. There are no ideal energy sources with a completely clear conscience or a universal application. Fossil fuels, uranium, renewables, and other sources like geothermal, will have to coexist. They are already co-existing even within the same company. South African coal producer Seriti Resources is building the largest wind farm in the country and has recently acquired a 100% stake in Windlab South Africa through its Seriti Green subsidiary. Coal and renewables are no longer mutually exclusive, and the diversification of coal companies into renewables speaks of their embracing what they have always been at their core - energy companies. 

In Africa, there is only one nuclear power plant in use, found in South Africa. However, the continent is an important consumer of coal. In South Africa, coal accounts for 80% of the power supplied to the grid. In terms of supply, Africa is highly relevant for both uranium and coal. While uranium is at home in Namibia, currently the world’s third-biggest producer of the radio atomic element, coal is primarily mined in South Africa, the seventh largest producer in the world and fifth biggest exporter. 

The reckoning happening in the energy world today is that the colors of the transition may not be all green; black crude oil, greyish coal, and dull silver-grey uranium muddle the energy spectrum. This argument is now being accepted. Indeed, the argument for stability first often overrides carbon considerations.

Spotlight on uranium: The long-term bet of the nuclear fuel cycle 

They say good things come to those who wait. Uranium companies have been very patient. “Seven years ago, when I started at Deep Yellow and uranium prices were at US$17/lb, I said we couldn’t progress to production at less than US$65/lb. People thought I was mad. Geopolitical events from two to three years ago led to a widespread realization that the supply shortage will be exacerbated,” said John Borshoff, managing director and CEO of Deep Yellow, an advanced uranium developer in Namibia. 

After the disasters of Fukushima and Chornobyl, the uranium mining industry was decimated. Those who remained standing had to go through periods of hibernation to survive the long winter of the nuclear fuel cycle. As a result, the supply side became highly concentrated, with only a few large uranium producers supplying the market, like Kazatomprom in Kazakhstan, Cameco in Canada, and two Chinese-operated mines in Namibia. Kazakhstan, Canada and Namibia are today the top three uranium-producing nations. 

At the beginning of 2024, the uranium spot price jumped close to US$100/lb and has since settled in the US$70 range, with more upside expected. The wait appears to be over. In March 2024, Paladin Energy restarted the Langer Heinrich Mine uranium mine in Namibia, one of the largest uranium mines in Africa. Paladin acquired the mine in 2002, and brought it into production in 2008; but ten years into production, the mine was placed under care and maintenance (in 2018). That same year, another Namibian cornerstone mine, Rössing, also known as the ‘old lady’ for being one the oldest in the world, was acquired by China National Nuclear Corporation (CNNC) from Rio Tinto. Namibia’s third core mine, Husab, holding one of the largest uranium resources in the world, is also majority-owned by a Chinese company, Taurus Mineral Limited, whose parent company is China General Nuclear Power Group. 

Along with the three active mines, the scorching Namib desert promises a strong pipeline of new uranium projects entering production in the coming years. After a marathon pace in the last decade, these players have recently broken into a sprint. Deep Yellow is advancing the Tumas, 67 million lb (probable reserves) project, having raised A$250 million in 2024, and is preparing to complete the plant by 2026. Its peer on the ASX, Bannerman Energy, is moving towards a final investment decision at its flagship Etango project, already permitted; in 2024, Bannerman closed A$85 million in financing and released a scoping study, preparing to start production in 2027. Elevate Uranium also leveraged the positive market sentiment in uranium in 2024, raising A$25 million for its Koppies project. Elevate announced a resource update to 66.1 million lb, of which 44 million lb is indicated. The company boasts the largest land position for nuclear fuels in Namibia, with 2,500 km² under its belt, as well as a patented ore beneficiation technology, which it plans to prove to reduce CapEx and OpEx by 50% versus traditional routes. 

Breaking this pattern of Australian-listed, Namibian-operating uranium companies is GoviEx Uranium, a Canadian company that brings the uranium story to Zambia, a country known primarily for copper. GoviEx is the only uranium actor in the country, but CEO Daniel Major says the geology is actually connected to Namibia and other known uranium spots: “The Karoo Sands Basin, which Muntanga and our recently acquired Lundazi license sits on, stretches from Tanzania, through Malawi, and Zambia, touching into Mozambique and Botswana, and going into Namibia, with a small section also crossing South Africa. These are sandstone-hosted uranium structures well-known in countries like Namibia or Malawi but underexplored in Zambia.”

Other uranium players in Africa include Canada-listed Madison Metals, operating in Namibia and recently closing an earn-in with Star Minerals; Lotus Resources, which just announced the funding to restart the Kayelekera uranium mine in Malawi; and Global Atomic, which updated the markets in October 2024 on discussions for closing a US$295 million financing for its Dasa project in Niger, believed to be the highest-grade uranium deposit in Africa. Dasa’s peer project in Niger is Madaouela, which was developed by GoviEx Uranium before its license was unexpectedly withdrawn by the government of Niger, a decision the Canadian company condemns as unlawful. “We have sent notifications of dispute to the Government and initiated an administrative recourse in Niger, seeking an amicable solution and the reinstatement of GoviEx in its rights to the project. Such an amicable solution has not been reached, and we are looking at our legal options and will update our shareholders accordingly,” Major told GBR. 

Until a solution is found, GoviEx has fully repositioned to Muntanga in Zambia. Though this was the smaller and less-advanced project in GoviEx’s portfolio, Muntanga has a 45 million lb resource (with 75% in the measured and indicated category), and it offers a simple and competitive operation, with soft rock that does not require milling, and 80% of the ore found in two main deposits. GoviEx secured the option to acquire a third license, consolidating its presence in Zambia to 1,226 km². 

GoviEx needed a baseline uranium price above US$65/lb to be able to bring Madaouela into production, but the Niger government had little patience. A spot of US$65/lb is the usual reference most developers quote for viable projects. The spot market is tight and tense, with every small change causing volatility, which makes it an unreliable indicator of the bigger picture for uranium. Meanwhile, the contract market, which is the larger share of uranium trade, is opaque, with portions of the contracts escalated, and floor-and-ceiling prices established for longer-term deals. The general trend has been for buyers to switch more to contracts in a bid to secure long-term supply. 

“Though prices seen today are healthy, the general consensus is that the spot price is bound to spike once utilities have a face-off with the supply deficit, which they currently seem to underestimate. Once the utilities start trying to buy uranium and find out that not enough is available, the uranium price will catapult through US$100 and beyond US$150/lb. That will drive utilities into a FOMO (fear of missing out) mode, scrambling over each other to buy nuclear fuel (uranium),” said Murray Hill, managing director & CEO of Elevate Uranium. 

The demand side is stronger than ever. The International Atomic Energy Agency (IAEA) predicts demand for uranium to exceed 100,000 t/y by 2040, which is double current production. New reactors are planned and old ones are being brought back to life all over the world, including in traditionally anti-nuclear countries. “Sweden is a classic example of a country with a highly ambitious green agenda that realized it could not rely entirely on renewables. They replaced their goal of 100% renewable energy by 2050 with a goal of going 100% fossil fuel-free instead, including building 10 nuclear reactors. This is symptomatic of what is happening elsewhere, including in Korea, Japan, India, the Middle East and China. The only countries yet to take action on nuclear are Germany, Austria, Australia, Spain and New Zealand,” commented John Borshoff, managing director and CEO of Deep Yellow. 

Small nuclear reactors (SMRs) are also coming into the picture, as tech companies like Microsoft and Amazon invest in off-grid nuclear capacity to power ever-hungrier data centers to accommodate AI. “Doing a search on an AI platform like ChatGPT takes 10 times more energy than doing that same search on Google... We are short of 20 to 30 brand-new, state-of-the-art, big reactors just to meet the potential demand of AI, without even considering other incremental sources of energy demand like EVs,” said Daniel Major, CEO at GoviEx Uranium. 

Meanwhile, the supply side is believed to be broken in more than one way, explained Borshoff, highlighting the exodus of expertise following the nuclear disasters at Chornobyl and Fukushima. Current mines are simply feeding into existing demand, and every time there is a supply shortage or fear of a shortage, the market trembles. Sanctions on Russia or by Russia, as we have seen recently with Moscow restricting enriched uranium exports to the US in retaliation for a similar measure imposed by the US, production shortages at Kazatomprom or Cameco, or Orano losing control over its uranium assets in military-governed Niger, further destabilize supply, leaving the uranium market in a fragile position. 

However, investors remain cautious given the uncertainty in the world.  Project developers still need to be a little bit more patient while the tide rises, but for now, they have confidence in the mainstream acceptance of nuclear power, which has changed everything. 

Spotlight on coal: Stagnant means stable 

In 2023, coal production (and consumption) reached an all-time high, according to the IEA. But outside of this isolated event, coal has been very consistent for the past 10 years. In fact, the world produces about the same amount of coal today as it did in 2014 – close to 9 billion t/y. According to Carbon Brief, global coal use is only 3% higher than 2013 levels, whereas coal use used to grow by 4% year-on-year during the 2000s. The capacity of coal-fired plants increased by about 30 GW in the last decade. Meanwhile, total CO2 emissions hit a new record in 2024 according to the Global Carbon Project. 

Thermal coal prices are expected to decline in both 2024 and 2025, essentially returning to the values prior to the 2022-2023 peak when the world had to grapple with the shock of losing Russian gas. This price consistency is proof of coal’s resilience. When some countries let go of coal, consumption increased in others. When supply is curtailed from a particular country, another comes to the rescue, like we have seen with the China-Australia dispute, with China substituting the Australian imported coal with alternatives from Indonesia, Mongolia, Russia and South Africa. Unlike gas, which is tied to extensive and expensive pipelines, coal is shipped globally, unbound by location. And when majors like Anglo American, Rio Tinto, or Glencore began exiting coal, new companies were born.

Anglo’s divestment from coal in South Africa resulted in the birth of Seriti Resources, now one of the largest suppliers to the country’s utility company (Eskom). Seriti has continued growing by absorbing new coal assets from other larger companies looking to shed their coal businesses, acquiring South32’s coal business in 2021. South Africa’s coal companies are also making acquisitions abroad, particularly in Australia. Last year, Thungela bought a majority stake in the Ensham coal mine in Queensland, Australia. Whether entering or exiting coal, these transactions are not pennies on the dollar. Thungela’s acquisition of Ensham is believed to amount to over US$200 million. 

Another mark of coal’s resilience is the ability of coal companies to transform by incorporating green businesses into their portfolios. For instance, South32 was created a decade ago as a spin-off from BHP Billiton; the company had thermal and metallurgical coal as base assets but has grown to develop a more diversified asset base. Coal companies are either investing in renewables, or in base and critical minerals like manganese, nickel or copper, essentially positioning to stay relevant in the future. This year Menar, a South African coal producer, bought the Metalloys ferromanganese smelting complex from Samancor. Upon completion of the transaction, the complex will be rebranded to Khwelamet. Besides coal and the manganese smelting business, Menar has a gold project in Kyrgyzstan and a nickel-cobalt asset in Turkey. 

We started this article by saying that multiple coal metrics show flat lines. Between those lines, we can read that coal is stable, not drastically down, and certainly not out.